Knowledge Partners

September 21, 2008

Will RRB catch up with Suzlon?

Business Today has a short article on RRB's plans post its split with its joint venture partner Vestas.

Today, RRB is doing everything it can to catch up—not only in size but also in terms of public mindshare and recall. “We were shackled earlier by our joint venture partner (Vestas), which had a 49 per cent stake. We were bound by an agreement to restrict operations only to India,’’ explains Sarvesh Kumar, Deputy Managing Director, RRB. Things started moving after the promoters bought out Vestas’ stake in 2006, though technical support continued till May this year. With Merrill Lynch committing a PE investment of over Rs 200 crore (the largest deal in the renewable energy segment in Asia ) in November 2007, the company now has drawn up a clear cut strategy.

“When we were with Vestas, we could only achieve a turnover of Rs 500 crore. Today, it’s near Rs 800 crore. This has allowed us to invest in a state-of-the-art technology blade manufacturing plant in Chennai, which has been validated by several agencies as Asia’s best,” Kumar says.

The company plans to leverage the technological edge it claims it has over Suzlon. Already, its exports are growing—turbines worth Rs 35 crore were exported to the US, Canada and nearby Asian countries last year. While the company had committed a capex of Rs 100 crore last year, this year an equivalent amount is being invested; this will be further scaled up next year. The turnover target for the current year is Rs 1,500 crore, with exports estimated at 15 per cent. If Suzlon has already got high-power 1.65 MW wind turbines in its stable, RRB plans to go one-up by launching a 2 MW version in a year’s time.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.